Watermark Conference for Women breakout: Retire with enough money

LendingClub proudly sponsored the Watermark Conference for Women held February 23, 2018 in San Jose, California. As part of the agenda, LendingClub’s VP of Funding Strategy Luna Federici moderated a standing room only breakout session on retiring with enough money featuring finance expert Teresa Ghilarducci.

Multiple of our own LendingClub conference attendees have already adjusted their retirement contribution percentages as a result of this session. A not so hidden secret is that women are great investors—they both save more than, and outperform, male investors by 4 basis points in workplace retirement accounts, which results in 15.4%, or nearly $300,000, more saved than men with the same salary over the course of a career.1 Given that American women outlive American men on average by two to three years,2 women need more money saved for retirement. See below for Luna’s thoughts on how to keep the retirement conversation going on investing for retirement.

How did retirement fit into the Watermark Conference, and what tips do you think women (and the men who attended!) left with?

Luna: Getting such a variety of women from all stages of their careers together in a room was powerful and created so much energy. Celebrity keynote speakers Amal Clooney and Reese Witherspoon set the tone by highlighting their real-world challenges in generally male dominated fields, some of them doing it while raising children. You’d think their lives as celebrities are so perfect outside looking in, so it was relatable to hear about pulling all-nighters at work, failures, successes, and even the times they just didn’t like parts of their jobs but kept going. The breakout sessions provided practical ways to implement what the keynote speakers were talking about. The conference covered quite a number of topics like career development, time management, etc. Only one component was financially oriented, which seems to be the piece women don’t generally talk about. It became evident that’s why the retirement topic was so well attended.

Not only was the retirement breakout session standing room only, it exceeded capacity. What do you think this says about how women are thinking about their financial futures?

Luna: Given the sheer quantity of questions during the session and how many women approached me after to ask about how they should be saving for retirement, it was apparent that investing for retirement is something women are thinking about, even nervous about. Part of that is that men have traditionally handled the investments—or talk like they do. But what was clear at this conference is women have a lot of questions and interest regarding finances. Whether they know where to go get those answers is less clear than the fact there’s high interest and they’re looking for answers to take action.

What specific tips and tools could people take away from the session and implement in their everyday lives?

Luna: Perhaps Teresa’s most salient point was you need to be honest with yourself, because that’s the only way you’ll start to understand where you need to make adjustments. Examine how you are as a saver and create a budget to stick to. Teresa did a great job outlining how to save for retirement by age bracket due to compound interest. That was very impactful. We tend to not necessarily save more or less depending on our age, but it’s very clear that as we get older, if we haven’t saved already, we need to increase the amount we’re putting away for retirement compared to younger savers. Secondly, examine your spending habits. Teresa did a great job of getting into the science of how it feels to consume, particularly non-necessary items that bring people joy when they buy. There’s always going to be that thing you think you need but you actually don’t. Teresa’s advice was to find that same level of consumerism and joy in what you already have, and limit new purchase what you actually need that’s within your budget.

How can this session on investing for retirement be applied to making changes in the workplace?

Luna: A lot of workplace conversations have become less taboo, like the male-female imbalance in leadership positions, as well as traditional power dynamics in general. This has a cascading effect through traditionally male conversations like investments. Sometimes it’s assumed that men know what’s going on in the financial markets or with tax laws that would impact retirement accounts. One thing women can do is educate themselves to be part of that conversion—or even start it. One takeaway I had was this conference provided a safe forum in which to ask questions. And we should always feel okay about asking questions. People need to be okay with exposing what they don’t know so that they can learn and begin to have these conversations naturally. Whether that’s about their employer’s 401(k) options or how to use an employee stock purchase plan to save, the first step is seeking that baseline level of understanding.

Absolutely! I think Reese Witherspoon said it best during her keynote, “No one knows everything about everything, and they’d be really annoying if they did.” So, Luna, how does all of this relate to LendingClub?

Luna: Certainly everyone should strive to have retirement savings. Teresa described an ideal candidate in the financial world. Somebody without debt at 30, someone whose been thoughtfully working toward that their entire lives. LendingClub helps people who are striving to become debt-free by facilitating loans at attractive rates when they borrow from us, and by providing investment options on the other side of the platform. The ideal is to be a thoughtful investor, saving for the present and future. Not having debt at 30 is unrealistic for many Americans,3 but her bigger point, which is a valid one, is that you shouldn’t be taking on additional unnecessary debt.

Teresa mentioned that if you’re hiring somebody to invest your money, it’s key to understand how they make their decisions. What would you say about that?

Luna: This is a two-part answer—you should pay attention to how an advisor makes their investment choices and how they’re compensated. Just like I said before about women doing research on the market, doing research on where professional advisors get their information is key to being able to trust they’re doing the right thing when investing on your behalf. It is also key to know how advisors are compensated to make sure their incentives are aligned with yours. A very clear piece advice Teresa gave was that if your retirement advisor isn’t fee based, but is trade-based, you shouldn’t be using them. LendingClub and the whole financial industry have been moving in a more aligned direction for a long time. It’s on us as a provider of financial products to cultivate that level of transparency. When we’re talking to consumers, it’s on us to educate them and structure our business so that our incentives are not misaligned with the consumers we’re serving.

What can we do day-to-day to keep the investing for retirement conversation going among women?

Luna: Eradicate the taboo, be honest, talk about your market value for what you’re paid, talk about your investment goals. Being open can be scary and talking about money is a challenge because everyone is in a different financial situation. But talking about how to develop tools to thrive financially is a shared goal, and many people would welcome more frank discussions about that. Our male peers are thinking the same things, they just may be more comfortable talking about their retirement, stock trades, whether or not they’re in bitcoin, etc. It’s about having that conversation with everyone, not just among men or women.

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